The International Finance Corporation (IFC), the private equity arm of the World Bank Group, has provided a $57 million convertible loan to the Vietnam Prosperity Joint Stock Commercial Bank (VPBank).

IFC can transfer the loan into ordinary shares of VPBank during its two-year term. The bank is now completing the necessary formalities.

The two-year term can be extended for another two years to help VPBank extend its lending to small and medium-sized enterprises (SMEs) in Vietnam, the lender said in a statement.

The loan will also support VPBank’s medium-term capital to lend in foreign currencies and boost its charter capital.

The Ho Chi Minh City Stock Exchange (HoSE), meanwhile, announced on July 18 it had received listing documents from VPBank.

The bank currently has charter capital of around $620 million and has registered to list 1.33 billion shares. It selected Viet Capital Securities as its consultant.

The IFC and co-sponsors previously lent $158 million to VPBank with a loan term of five years and trade sponsorship of $50 million to support its lending to SMEs, especially female-owned businesses and import-export businesses in 2016 and early 2017.

Mr. Kyle Kelhofer, IFC Country Director for Vietnam, Cambodia and Laos, expects the long-term loan from IFC will help VPBank fully serve SMEs and support private sector development. “The IFC has committed that we will continue supporting VPBank in strengthening its management,” he said.

Mr. Nguyen Duc Vinh, CEO of VPBank, said the loan will provide it with medium-term capital for foreign currency loans and contribute to its charter capital to strengthen its capital adequacy ratio (CAR), in case the IFC implements its right to convert the loan to shares.

VPBank has been trading actively on the OTC market, at a price fluctuating around VND35,000 ($1.54) per share. At this price, VPBank’s market capitalization stands at approximately VND46,700 trillion ($2.1 billion), less than the three State-owned banks of Vietcombank, BIDV, and Vietinbank but much higher than other commercial banks.

VPBank told its shareholders meeting in April that it will list on HoSE this year, with 15 per cent being sold in a private placement.